Baltimore Real Estate - Making it work in the City

For the second month in a row, month-to-month foreclosure numbers have risen across the state. In the Baltimore-Towson metro area, a year-long skid in foreclosure filings, which have dropped by half since last April, has come to an end.

Numbers released by California-based firm RealtyTrac Inc. show that Maryland foreclosures in April 2009 jumped 8.4 percent compared to March 2009, but were down 40 percent compared to April 2008. The local monthly increase was more striking, at 27.86 percent, but still down 42 percent from a year ago.

The Baltimore-Towson metro area includes the city of Baltimore, as well as Baltimore, Anne Arundel, Carroll, Harford, Howard and Queen Anne's counties.

The numbers reflect a general drop in foreclosure activity since the state passed emergency laws last spring that extended the foreclosure process by more than two months to allow for distressed homeowners to negotiate forbearance agreements with their lenders.

But Anirban Basu, a local economist and president and CEO Baltimore-based Sage Policy Group, said that the rising monthly statistics are a sign that the short-term benefits of state and federal anti-foreclosure measures are history, and that we should expect more foreclosures until the housing market bottoms out sometime in 2010.

The reason, he said, is the poor labor market. On Friday, the Bureau of Labor Statistics reported that Maryland has lost 59,700 jobs since March 2008, although between February and March of this year, the state actually gained about 4,000 jobs.

"Because labor growth is slower, we won't see the housing market improve until 2010. We will probably not see a true bottom in the housing market until 2010," Basu said. "[Foreclosures are] down 40 percent. That is largely the result of public policy. It is not the result of an improved housing market. Since that time, job losses have accelerated, not decelerated. Delinquencies have accelerated, not decelerated."

Basu also predicted some growth beginning in the next few months, and that by the end of 2009, the U.S. economy as a whole would be expanding again. One promising sign, he said, is the stabilization of home prices in traditionally less volatile markets such as Montgomery County.

"It has become a national preoccupation among economists to look for green shoots," he added.

Massoud Ahmadi, the director of research of Maryland's Department of Housing and Community Development, disagreed, saying that it's too early to be worried about a renewed surge in foreclosures.

So there you have it, good news in a bad economy. Baltimore has good real estate deals, but it is contingent on the homeowner. The best way to buy or sell a home is to work with a real estate group.